Dealers cry about Tesla selling cars directly to public

[JEDI]

http://money.cnn.com/2013/05/20/autos/telsa-car-dealers/index.html?iid=HP_LN

waaaaaaahhhhhhhhhhhhh!

This shill's explanation about competition between car dealerships is priceless.

It's not as if competing dealerships are competing to offer you prices lower than what they have to pay the manufacturer. It's only a matter of competing for which middle man sticks you with the lowest overhead cost, on top of the car's base price.

Kudos to Tesla for cutting out the middleman entirely. :thumbsup:

and Once again, the state of Texas standing in the way of progress. (can show cars but cant sell directly in Texas)

 

[xanis]

I saw a Model S for the first time on Saturday. Weird-looking car.

 

[Jimzz]

Yep NC is also looking into Tesla. Funny its the "red free market" states getting upset at this.

 

[vi edit]

I've wondered for years with the advent of the interent what values many dealers even add anymore. They seem like a quite unnecessary speedbump and just nothing more than another cost and hassle in buying a car. If a company like Toyota or Ford which have their own finance arms setup a site where you basically applied for financing online, got your approval and then basically built out the car and arranged travel to the factory to pickup why not?

Call it an "American Delivery"

 

[FallenHero]

I've wondered for years with the advent of the interent what values many dealers even add anymore. They seem like a quite unnecessary speedbump and just nothing more than another cost and hassle in buying a car. If a company like Toyota or Ford which have their own finance arms setup a site where you basically applied for financing online, got your approval and then basically built out the car and arranged travel to the factory to pickup why not?

Call it an "American Delivery"

As long as they could still offer test drives of cars, I'd go for that in a heartbeat.

 

[mmntech]

Back in the early days of motorcars, it was cheaper for folks like Ford to franchise out sales. The dealer provides the initial investment, sets up the shop, takes care of their own employees, and offers maintenance service. It was a good way to get cars in a lot of towns across the country without having to spend a ton of capital to do it.

Buying mass produced goods direct from the manufacturer is a fairly recent phenomenon. What scares the hell out of the dealers if this will become the norm. What use is the dealer when you can just go online, pick out the car you want, pay for it, they make it for you, and you go pick it up. A lot of automakers have their own financing departments now as well. You can do this with much smaller stores and keep less inventory in stock. That significantly reduces overhead. Electric cars require less maintenance as well. No oil or filters to change, no engine flushes or tuneups, no transmissions to break. All they really need is tires, brake jobs, and the occasional fluid top up for the hydraulics. All stuff that doesn't have to be done regularly. Thus you're not spending as much on garage space or trained mechanics. It's appealing for companies to be in total control of the entire chain from smelter to showroom. Reduces costs while maximizing profits.

So of course dealers are going to lobby against direct sale.

There is a Tesla store here in Toronto. Though I haven't seen any on the road yet. Will be a while before they catch on up here, as they haven't solved the heat in the winter problem yet. Did see a Leaf though about a month ago.

 

[smackababy]

How exactly does Tesla sell cars? There is a Tesla store near my house I've been into a few times, but they have one car (inside the store no less) and it is at a mall. I guess they could have a couple parked somewhere?

 

[2timer]

Yep NC is also looking into Tesla. Funny its the "red free market" states getting upset at this.

Ha ha yes :thumbsup:

 

[vi edit]

There's obvious times where a dealer (or some form of it) is still required. Trade-ins being the most common. Next would be test drives/dash stroking/just not feeling comfortable with non-traditional sales practices (AKA old people), ect.

But outside of that, if you want a new car, I could see a brand setting up a dozen or so major regional "hubs" where they have every model on hand to look at and test drive on site (think large space here with it's own track or something) with absoutely zero pressure to buy. You look at the car, test drive the car and go home and think it over. Go back online that night, hit the site, get your pre-approval done. Then go build your car online with exactly the options you want. You get updates on the build process of your car and 6 weeks later you get an email with your cars picture and an "Out for delivery!" notification when it's getting sent to that regional hub. Drive over, sign a couple paper, get the keys and go.

 

[jaedaliu]

How exactly does Tesla sell cars? There is a Tesla store near my house I've been into a few times, but they have one car (inside the store no less) and it is at a mall. I guess they could have a couple parked somewhere?

Probably have a locked garage nearby that they can pull the car out for a test drive.

As for actually purchasing and receiving the car, there's a waiting list, so they'll probably deliver one to you from the flatbed when your turn comes up.

 

[zoiks]

I'd love to get one. Perhaps in a few years.

 

[Imported]

Chrysler was forced to sell off a dealership they owned in CA due to the franchise laws here. I would think all car manufacturers have to play by the same rules but I don't know.

That said, wouldn't mind replacing the Prius for one.

 

[Slew Foot]

There's obvious times where a dealer (or some form of it) is still required. Trade-ins being the most common. Next would be test drives/dash stroking/just not feeling comfortable with non-traditional sales practices (AKA old people), ect.

But outside of that, if you want a new car, I could see a brand setting up a dozen or so major regional "hubs" where they have every model on hand to look at and test drive on site (think large space here with it's own track or something) with absoutely zero pressure to buy. You look at the car, test drive the car and go home and think it over. Go back online that night, hit the site, get your pre-approval done. Then go build your car online with exactly the options you want. You get updates on the build process of your car and 6 weeks later you get an email with your cars picture and an "Out for delivery!" notification when it's getting sent to that regional hub. Drive over, sign a couple paper, get the keys and go.

that makes sense but im sure theres some car salesman lobby thats bribing politicians to ban this

 

[jaedaliu]

Chrysler was forced to sell off a dealership they owned in CA due to the franchise laws here. I would think all car manufacturers have to play by the same rules but I don't know.

That said, wouldn't mind replacing the Prius for one.

The manufacturer isn't allowed to directly compete with the dealer at the consumer sales level due to price advantages.

However, Tesla does not have a dealership network, so I would assume that the laws don't quite apply here. To me, it feels like an anti-competitive lawsuit by established dealers against a small manufacturer.

 

[A5]

that makes sense but im sure theres some car salesman lobby thats bribing politicians to ban this

It's called the NADA.

 

[Imported]

The manufacturer isn't allowed to directly compete with the dealer at the consumer sales level due to price advantages.

However, Tesla does not have a dealership network, so I would assume that the laws don't quite apply here. To me, it feels like an anti-competitive lawsuit by established dealers against a small manufacturer.

I'm not trying to rail against Tesla (I'd own one/be put on the waiting list if I could charge the car in my apt), but they have a dealership down the road from my work place and there's a Tesla store in almost every mall around here. I don't see how they don't have a dealership network. Yes, they're all factory owned, but that is what the other dealerships are clamoring about from what I can tell.

 

[Midwayman]

I'd much rather order my car online so I can get all the options and colors I want rather than being pressured to take one that's on the lot. The whole old school car dealership experience stinks in just about every way. The only thing I'd miss is test drives.

 

[MagickMan]

As long as they could still offer test drives of cars, I'd go for that in a heartbeat.

Also, you have to get them fixed under warranty sometime. It helps to build a good relationship by buying your cars there.

 

[MagickMan]

How exactly does Tesla sell cars? There is a Tesla store near my house I've been into a few times, but they have one car (inside the store no less) and it is at a mall. I guess they could have a couple parked somewhere?

He have that too, there are a pair of tester cars in the parking lot.

 

[GTaudiophile]

As someone who bought TSLA at $55 I of course hope they continue to shake things up but somehow miss the red tape of litigation.

 

[unokitty]

http://money.cnn.com/2013/05/20/autos/telsa-car-dealers/index.html?iid=HP_LN

... It's not as if competing dealerships are competing to offer you prices lower than what they have to pay the manufacturer. It's only a matter of competing for which middle man sticks you with the lowest overhead cost, on top of the car's base price.

Kudos to Tesla for cutting out the middleman entirely. :thumbsup:

and Once again, the state of Texas standing in the way of progress. (can show cars but cant sell directly in Texas)

Car dealers make large political contributions.

Lawmakers pass laws that protect Car Dealers from competition.

Unlike Japan, where when I wanted to buy a Honda CL-450, I bought it from Honda. Not some dealer that needed to make extra profit to share with a politician.

When it needed service, I took it to a maintenance warehouse run by Honda. Not some dealer looking for a second profit center.

In effect, American Politicians have made it illegal for any car company to sell cars in the the same way that Dell or Lenovo sell computers. That is, you can't buy a car directly from the manufacturer.

So, as a consumer, you pay more. But then, the money for the campaign contribution has to come from somewhere doesn't it?

Uno

 

[Brovane]

I can see why these laws where originally put in place. When Car Manufacturers where first starting out in the early 20th centry they couldn't afford large distrubtion networks. So they started working with dealerships. At some point protection was put in so the Car manufacturers couldn't just switch it up on them and start selling direct. However realistically I don't see how that is currently the case and the law really hasn't caught up with the reality.

In Tesla's case what has saved them in several states is they have no dealers so judges have ruled that they can sell direct since they are not impacting any current dealers. However as we can see in some states anti-competitive laws have been put in place to try and they are being used against Tesla here to try and force it to do business with the dealers. Tesla doesn't want to let them in because I suspect that this could cause more issues down the road. As long as they have no dealers then they can keep saying no dealers are being impacted by selling direct. Realistically I think the Federal government needs to come in and smack the states that are doing this and just take juridistication under inter-state commerce and tell the states that Tesla can sell direct if it wants. Kind of like with Satellite dishes, for years local HOA's banned them until the Federal government stepped in and said under a certain size a satellite dish installation cannot be restricted by HOA's.

 

[jagec]

Sounds much like the three-tier system for alcohol distribution, which also serves to screw consumers and small-scale producers.

Middlemen can DIAF. If you add value, great, people will buy from you without any special government carve-outs. If you don't add value, find something else to do.

 

[Doppel]

I am sympathetic to the losses a person has if they've built a business under current law and it changes to their detriment. However, at some point you need to kick them out of the nest.

Tesla is demonstrating that their approach can work with their particular clientele.

Other brands could certainly sell in this manner. My last vehicle--the most expensive I've bought--I actually didn't even bother test-driving. And all the vehicles I've ever bought beforehand I only test-drove to ensure the thing wasn't a total POS for some reason--I never have intended to buy a particular vehicle, test-drove it, and then decided no it's not for me. I think if you know enough about what you want the test drive becomes somewhat pointless.

 

[sdifox]

I'm not trying to rail against Tesla (I'd own one/be put on the waiting list if I could charge the car in my apt), but they have a dealership down the road from my work place and there's a Tesla store in almost every mall around here. I don't see how they don't have a dealership network. Yes, they're all factory owned, but that is what the other dealerships are clamoring about from what I can tell.

Why should Tesla be forced to have a 3rd party dealership? Their product, the can sell it anyway they want.